Gonsalves: Politics at the pump

How high would gas need to be to force a dramatic change in driving habits or to drastically re-prioritize household budgets?

Sean Gonsalves

The price of gas these days! (Insert sneer here). But how high would gas need to be to force a dramatic change in driving habits or to drastically re-prioritize household budgets?

According to my unscientific random sample of folks filling up their tanks on Friday in Hyannis, it would have to hit $5 a gallon.

As of Friday afternoon, the average price of regular unleaded on the Cape was $3.74, up from last week's average of $3.68, according to the Times weekly survey. The state average, according to GasBuddy, was $3.78, while the national average was $3.86. The cheapest gas I could find was the Stop & Shop station on West Main Street, offering regular unleaded for $3.69 a gallon.

As she filled her red Saturn, Amy Anderson of Hyannis told me, as long as it stayed below $5, she wouldn't have to re-think her driving habits or completely re-jigger her budget.

"It costs me $36 to fill up. And that lasts me two weeks. So I'm grateful to have a car that's good on gas," she said, smiling at the thought of her relatively light driving needs and smart car purchase.

Who, or what, is to blame? "The first thing that comes to mind is Bush and our dependence on foreign oil. Then again, we can't blame Bush forever," she said.

Over at the next pump, filling the tank on his full-size Chevy pickup he uses for his trash business, Tim from Yarmouth said it probably didn't matter how high the price went, "I have no choice but to pay."

But, Tim's "blame"-radar covered more ground than Anderson's and — analysts say — is a bit closer to the complicated truth, in so far as there's a multitude of global forces pushing prices higher.

Still, at the top of Tim's "blame" list are politicians and Big Oil. "The lobbyists for the oil companies have a lot of power. And we've had presidents who were oil men," he said.

On the other hand, he's not a big fan of regulation and would like to see more drilling and oil refineries. He also doesn't see any reason to think using less will bring down prices.

"People are using less now and the price keeps going up. And the oil companies are making more and more money. It's a simple fix if you ask me ... if we could get the price down to $1.60 a gallon, the economy would turn around immediately."

Tim and Anderson aren't alone. While I didn't find any polling data on what America's "freak-out" threshold is on gas prices, polls do say a majority of Americans place most of the blame at the feet of both politicians and the oil companies. Slim majorities also favor more drilling for oil and natural gas right here in North America, which is why even President Obama — arguably the nation's first "green(ish)" president (with apologies to Jimmy Carter) — now says he's all for developing the southern portion of the Keystone pipeline.

But, according to a statistical analysis of 36 years of gas prices and U.S. domestic oil production, The Associated Press found "no statistical correlation between how much oil comes out of U.S. wells and the price at the pump."

If more domestic oil drilling worked as politicians say, we'd be paying about $2 a gallon right now, AP reported on Friday.

"Political rhetoric about the blame over gas prices and the power to change them — whether Republican claims now or Democrats' charges four years ago — is not supported by cold, hard figures. ... Sometimes prices increase as American drilling ramps up. That's what has happened in the past three years."

Since February 2009, U.S. oil production has increased 15 percent, while gas prices over that same time span went from $2.07 per gallon to $3.58. "It was a case of drilling more and paying much more," the AP reported.

In fact, the AP found, U.S. oil production right now is at the same level it was in March 2003, when gas was just $2.10 per gallon (adjusted for inflation). The analysis was independently verified by a team of economists and statisticians.

Bottom line: "Drill, baby, drill" may be a catchy phrase, but wouldn't affect prices much "because oil is a global commodity and U.S. production has only a tiny influence on supply. Factors far beyond the control of a nation or a president dictate the price of gasoline."

As Christopher Knittel, professor of energy economics at MIT, notes, U.S. oil production accounts for about 11 percent of the world supply, which means that even if we were to pump up oil production by 50 percent, at most it would only cut gas prices by about 10 percent.

"There are not many markets where the United States can't impose its will on market outcomes," Knittel told the AP. "This is one we can't, and it's hard for the average American to understand that and it's easy for politicians to feed off that."

In my limited survey, I did find one person — Kevin Henderson from Harwich — who said he doesn't blame any one thing or person. Besides, it hasn't yet hit that $5 threshold that would force him to do things differently.

"The thing is, you can't go without," said Henderson, who was filling up his black F-350 pickup for $3.73 per gallon at the Hess station across town.

It costs about $115 to fill his tank, he said, which translates into a monthly gas bill of about $800.

Click. The pump stopped at $99 and some change. "Oh, I must've had a little in the tank before I filled up," he said with a grin.

If you're a working person on the Cape, you really can't go without gas. And yet, when it comes to prices, the best any of us can really do (in the short term) is simply grin and bear it.

What's kinda scary is that's pretty much the only short-term option for politicians, too: grin and bear it — if you're an incumbent. Or, exploit voters' sense of infuriated powerlessness with magic-button promises — if you're trying to unseat one.

Email Sean Gonsalves at sgonsalves@capecodonline.com.

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